Developer contributions to the financing of infrastructure

Summary

Developer contributions to infrastructure involve a developer providing a payment (or levy) to support infrastructure in the area they develop. The infrastructure is typically provided by the transport authority for the area. One rationale for the levy can be recognition that a development will impose burdens on existing infrastructure and so the developer should contribute to mitigating that burden. In this case the contribution made by the developer might be for infrastructure directly related to the development (such as a cycle route to a supermarket). The second rationale is that developers and businesses benefit from good transport infrastructure and so will be willing to contribute to mechanisms providing resources which allow this infrastructure to be built and maintained.  In this case, the contribution may go towards the public authority’s funding pool which funds those infrastructure projects intended to benefit the city or region.  The benefit of the levy will depend on the relevance to the developer and to the city or region of the infrastructure it is used to support. However there are questions about the relationship between different types of transport infrastructure and economic development. Further there are questions about the impact that both levies on development and investment in infrastructure can have on competitiveness. In all of these questions, perceptions of decision-makers and actors are relevant.